Surprise readjustment puts September 1 corn inventories down more than ten percent versus 2019 with June through August three month “disappearance” at a near record 3.02 billion bushels.

Inventories of the largest US agricultural crop were officially revised downward in a once annual government report widely watched by traders and farmers.

Known in the trade as the “September Grain Stocks” report, the publication is relied upon by analysts because it sets the official benchmark for grain inventories in the United States as of September 1, the start of the new marketing year for big grains like corn and soybeans. It is released on September 30 each year by the National Agricultural Statistics Service (NASS), the Agricultural Statistics Board, and the United States Department of Agriculture (USDA).

Yesterday’s numbers shocked the corn markets by showing an unanticipated decline of 226 million bushels of corn from September 1, 2019 to September 1, 2020. Most analysts had predicted that US corn inventories would have been around 2.250 billion bushels at the beginning of September, but the government pegged the official number at 1.995 billion bushels. Corn futures markets reacted instantly, with most corn futures contracts higher by around three percent.

Importantly, it was not simply the decline in inventories that garnered the attention of corn watchers. Usually when inventories decline significantly it is because of a supply problem, but in fact the USDA showed a minimal rise in corn production, which means corn usage was higher. In fact, the